SIPP buy property?

[supercommuter]

Hi - I have a 100k in a pension pot from my previous employer. I am 28 and currently own my own house (well...2/3rds of it. Rest is mortgaged)

Is there anyway I can transfer my Pensions into a SIPP and buy property within a SIPP tax wrapper?

Or have i just made this up....?

Thanks

[anonymous-user]

supercommuter said:

Hi - I have a 100k in a pension pot from my previous employer. I am 28 and currently own my own house (well...2/3rds of it. Rest is mortgaged)

Is there anyway I can transfer my Pensions into a SIPP and buy property within a SIPP tax wrapper?

Or have i just made this up....?

Thanks

Commercial Property yes, residential no.

[supercommuter]

desolate said:

supercommuter said:

Hi - I have a 100k in a pension pot from my previous employer. I am 28 and currently own my own house (well...2/3rds of it. Rest is mortgaged)

Is there anyway I can transfer my Pensions into a SIPP and buy property within a SIPP tax wrapper?

Or have i just made this up....?

Thanks

Commercial Property yes, residential no.

How would the property be managed? Assume it would have to be a complete cash purchase of property, if so £100k is not going to get me very far

[anonymous-user]

supercommuter said:

How would the property be managed? Assume it would have to be a complete cash purchase of property, if so £100k is not going to get me very far

You can borrow in your SIPP against a commercial property up to a certain factor of your capital.

Personally, unless you have a specific property in mind that you think is a great deal, or you would like to have control of the property for other reasons (like it being linked to your own business), I would leave your pot invested in shares. Moving it into a single asset is really the opposite of a diversified portfolio.

[anonymous-user]

supercommuter said:

How would the property be managed? Assume it would have to be a complete cash purchase of property, if so £100k is not going to get me very far

So it wasn't a serious question then?

[sammyb349]

Only a tad off topic but... 100k pot at 28... Chapeau, Chapeau! Now pls do tell me of said employment as i’d Like a piece of that tasty pension pie

[supercommuter]

EddieSteadyGo said:

supercommuter said:

How would the property be managed? Assume it would have to be a complete cash purchase of property, if so £100k is not going to get me very far

You can borrow in your SIPP against a commercial property up to a certain factor of your capital.

Personally, unless you have a specific property in mind that you think is a great deal, or you would like to have control of the property for other reasons (like it being linked to your own business), I would leave your pot invested in shares. Moving it into a single asset is really the opposite of a diversified portfolio.

Thanks, agreed. I do have my Stocks and Shares ISA and some savings but had been ploughing most of my capital into paying off my mortgage while money is cheap.

desolate said:

supercommuter said:

How would the property be managed? Assume it would have to be a complete cash purchase of property, if so £100k is not going to get me very far

So it wasn't a serious question then?

It was a serious question and somebody answered stating I could borrow within my SIPP so my assumption was wrong..I will consult google for more information..sorry for adding a laughing face

sammyb349 said:

Only a tad off topic but... 100k pot at 28... Chapeau, Chapeau! Now pls do tell me of said employment as i’d Like a piece of that tasty pension pie

Haha. I started at 18 for a big corporate company with a generous pension scheme and have paid in max contributions since then. I have moved to another company now and checked it yesterday and was quite surprised

Edited by supercommuter on Thursday 10th May 11:00

[PurpleMoonlight]

A SIPP can borrow up to 50% of its value. So you could have around £150,000 to play with.

Outside the south east, you should be able to get something for that.

[supercommuter]

PurpleMoonlight said:

A SIPP can borrow up to 50% of its value. So you could have around £150,000 to play with.

Outside the south east, you should be able to get something for that.

Thank you!

[jonah35]

Fees and charges to do it would be punitively be at that level

[moles]

What is classed as commercial property in this context I take it a bed and breakfast isn’t?.

[anonymous-user]

moles said:

What is classed as commercial property in this context I take it a bed and breakfast isn’t?.

I *think* it can be.

Not my area other than as a punter. Someone will clarify.

[supercommuter]

moles said:

What is classed as commercial property in this context I take it a bed and breakfast isn’t?.

This is what I was thinking of, maybe not now but in a few years when I have a bigger pot.

But I did not know where the 'profits' would actually go, back into the SIPP? What happens when you hit the lifetime allowance?

[PurpleMoonlight]

The SIPP doesn't trade as a B & B, it owes the property and lets it to someone who does.

Trading is not tax exempt within a pension arrangement.

[Ginge R]

supercommuter said:

Hi - I have a 100k in a pension pot from my previous employer. I am 28 and currently own my own house (well...2/3rds of it. Rest is mortgaged)

Is there anyway I can transfer my Pensions into a SIPP and buy property within a SIPP tax wrapper?

Or have i just made this up....?

Thanks

The regulator is cottoning on to the alleged abuse/misuse of *some* SIPP/SSAS providers to (ostensibly) invest into physical commercial bricks and mortar. Some here will have a view about whether or not we’ll see some big players going to the wall this year or next.

Unless there is a genuinely compelling and extenuating reason to do so, unless you’re dealing with a company that you’d trust to babysit your first born, unless you can imagine irreversibly losing the whole lot and simply not caring, I’d consider avoiding doing so like the plague.

You already are linked to the value of property (via the roof over your head), don’t forget, so it might be an idea to diversify. I go back to my earlier point - don’t ask ‘why not?’, ask ‘why?’. It’s a suitable course of action for only a tiny number of people - usually a business owner wishing to buy his/her premises - and hardly any mainstream saver.

[PurpleMoonlight]

Ginge R said:

The regulator is cottoning on to the alleged abuse/misuse of *some* SIPP/SSAS providers to (ostensibly) invest into physical commercial bricks and mortar. Some here will have a view about whether or not we’ll see some big players going to the wall this year or next.

Unless there is a genuinely compelling and extenuating reason to do so, unless you’re dealing with a company that you’d trust to babysit your first born, unless you can imagine irreversibly losing the whole lot and simply not caring, I’d consider avoiding doing so like the plague.

You already are linked to the value of property (via the roof over your head), don’t forget, so it might be an idea to diversify. I go back to my earlier point - don’t ask ‘why not?’, ask ‘why?’. It’s a suitable course of action for only a tiny number of people - usually a business owner wishing to buy his/her premises - and hardly any mainstream saver.

Thanks for tarring everyone with the same brush.

[Ginge R]

Maybe I should have emboldened, underlined and italicised ‘some’ instead of simply placing an asterisk at either end of it.

[JulianPH]

PurpleMoonlight said:

Ginge R said:

The regulator is cottoning on to the alleged abuse/misuse of *some* SIPP/SSAS providers to (ostensibly) invest into physical commercial bricks and mortar. Some here will have a view about whether or not we’ll see some big players going to the wall this year or next.

Unless there is a genuinely compelling and extenuating reason to do so, unless you’re dealing with a company that you’d trust to babysit your first born, unless you can imagine irreversibly losing the whole lot and simply not caring, I’d consider avoiding doing so like the plague.

You already are linked to the value of property (via the roof over your head), don’t forget, so it might be an idea to diversify. I go back to my earlier point - don’t ask ‘why not?’, ask ‘why?’. It’s a suitable course of action for only a tiny number of people - usually a business owner wishing to buy his/her premises - and hardly any mainstream saver.

Thanks for tarring everyone with the same brush.

I am not aware of the regulator looking into any SIPP providers for holding commercial properties. Dodgy collectives yes, but not not commercial property. What is your intel on this Al? Which big players do you think are going to hit the wall as a result of holding commercial properties?

Equally, how do you believe someone could loose the whole lot when buying a commercial property?

We normally agree but I think you are way off the mark with these explosive comments.

OP - Bed and breakfast property would not be accepted in a SIPP and as someone has already commented at your price point the SIPP fees for holding commercial property would outweigh the potential benefits. I would keep the money invested in a well managed portfolio if I were you.

[Condi]

sammyb349 said:

Only a tad off topic but... 100k pot at 28... Chapeau, Chapeau! Now pls do tell me of said employment as i’d Like a piece of that tasty pension pie

I've come to the conclusion that normal people are best avoiding this section of PH!

[supercommuter]

Condi said:

sammyb349 said:

Only a tad off topic but... 100k pot at 28... Chapeau, Chapeau! Now pls do tell me of said employment as i’d Like a piece of that tasty pension pie

I've come to the conclusion that normal people are best avoiding this section of PH!

I'm a normal person, just did what my mum told me when I started my new job fresh out of college at 18